Text of the letter from Arnotts chairman Richard Nesbitt to Michael O'Connor rejecting his family's bid to buy the company:

Sunday, 27 May 20007

Re: Arnotts Holdings Limited

Dear Michael,

Please treat this letter as written to the entities that hold Arnotts Holdings Shares on behalf of both you and/or Anne O'Connor. I mean no discourtesy in not writing directly to your holding companies individually.

Late on Friday afternoon "an indicative Non Binding Offer to Acquire Arnotts Holdings Limited" was delivered to the Companies' Offices and I believe later delivered to some of the Nesbitt family who hold Arnotts Holdings Limited shares.

The indicative, Non Binding and un-financed offer was also sent to The Irish Times. I in fact learnt of it after contact by an Irish Timesjournalist who was able to read to me from the terms of the document. Whatever your intentions, negotiation through the media is most damaging to the company Arnotts Holdings Limited. The success and welfare of Arnotts is important to many people including its staff, its pensioners, its customers, those it does business with and its shareholders. It is clear that whoever chose to involve the media has a total disregard for the interests and aspirations of our staff, our pensioners, our customers, business relationships with third parties and the shareholders.

As you know, I hold a controlling interest in the shares of Arnotts Holding Limited. I have no interest in selling as I have made known both to you, your appointed Director and your lawyers. Accordingly, your indicative non-binding and unfinanced offer is what I can best describe as an irrelevant although damaging distraction to Arnotts Holdings Limited, at a time when you are aware that the plans for the development of the Northern Quarter are about to move on to the next stage.

Over the course of Saturday I have had the opportunity to speak with some of the other shareholders who were extremely surprised by the manner in which your offer has been communicated. Those I spoke to both understand my position and support it.

If you do not want to be a shareholder in Arnotts Holdings Limited I repeat my offer to buy you out at €25 per share or if you dispute this value I am prepared to have the value determined by an independent expert. I do not propose to correspond with you further on this topic, unless of course, you wish to take up my offer.

Yours sincerely,

Richard Nesbitt.